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March 30, 2016Technology to Make Clean Energy From Coal Is Stumbling in Practice

An electrical plant on the Saskatchewan prairie was the great hope for industries that burn coal.

In the first large-scale project of its kind, the plant was equipped with a technology that promised to pluck carbon out of the utility's exhaust and bury it underground, transforming coal into a cleaner power source. In the months after opening, the utility and the provincial government declared the project an unqualified success.

But the $1.1 billion project is now looking like a green dream.

Known as SaskPower's Boundary Dam 3, the project has been plagued by multiple shutdowns, has fallen way short of its emissions targets, and faces an unresolved problem with its core technology. The costs, too, have soared, requiring tens of millions of dollars in new equipment and repairs.

"At the outset, its economics were dubious," said Cathy Sproule, a member of Saskatchewan's legislature who released confidential internal documents about the project. "Now they're a disaster."

The utility that runs the project, SaskPower, and advocates for carbon capture argue that the setbacks are typical teething problems associated with any new and complex technology.

"Over time, as more companies, countries engage in carbon capture and storage technologies, the price for everybody is going to come down," Mike Marsh, the chief executive of SaskPower, told a legislative committee in January. "That will make it easier to employ."

The Boundary Dam Power Station sits near a wealth of resources not far from the North Dakota border.

Hundreds of years of coal reserves are buried under the ground nearby, virtually eliminating transportation costs. And the mining creates employment in an area with limited job prospects.

"It's a low-cost, stable supply," Mr. Marsh said. "There's a tremendous opportunity in North America to continue to utilize coal."

To the utility and the provincial government, the process known as carbon capture and storage seemed tantalizing when a review of the power system began 11 years ago.

The technology offered a way to stick with coal in a carbon-conscious era. It was especially attractive in Canada, where rising emissions from the oil sands have more than offset reductions elsewhere, including Ontario's abandonment of coal-fired electrical generation.

Through the process, machinery would first remove most of the soot and ash from the coal's exhaust. The exhaust would then pass through a kind of chemical called an amine that would snatch the carbon, in the form of carbon dioxide, out of it. The gathered carbon dioxide, separated from the amine, would be compressed, moved through pipelines and ultimately buried underground.

Variations of the technology have been used as far back as the 1920s. And small demonstration projects have largely worked, including one in Norway that opened in 2012.

Boundary Dam, which received a major Canadian subsidy and opened in September 2014, was the first full-scale deployment of the technology to cut emissions from burning coal. Saskatchewan picked a process owned by Shell, encouraged by its history with petrochemicals.

At the outset, the utility and the province said the project was working as intended, capturing 90 percent of the plant's carbon. It was the equivalent, they said, of taking 250,000 cars off the road. Environmentalists and politicians from around the world came to check out Boundary Dam.

But the success story disintegrated last November when Ms. Sproule, a member of the opposition New Democratic Party, unveiled the confidential documents in the provincial legislature. She wouldn't identify the people who provided the documents, although the government confirmed their authenticity.

The documents showed that the system was working at only 45 percent of capacity. One memo, written a month after the government publicly boasted about the project, cited eight major problem areas. Fixing them, it said, could take a year and a half, and the memo warned that it was not immediately apparent how to resolve some problems.

A chart covering the first year of operation showed that the system often didn't work at all. When it was turned back on after shutdowns for adjustments and repairs, the amount of carbon captured sometimes even dropped.

The buoyant public remarks, Mr. Marsh said, accurately reflected the company's early assessment of the system. "We were very optimistic when this plant came online," he said.

Still, he acknowledged that "there were a few statements that it was achieving more than it had." Mr. Marsh characterized many of the problems as design issues, such as inadequate temperature control systems, rather than fundamental flaws.

But Boundary Dam has exposed a problem with Shell's process when used with coal exhaust. Despite the plant's initial filtering, tiny particles of ash still remain in the exhaust and contaminate the amine, reducing its ability to grab carbon, Mr. Marsh said.

"Over all, we are pleased with the performance of the capture technology," Shell Canada said in a statement, adding that it was working with SaskPower "to optimize operations and capture any lessons that can be applied to improve future projects."

But the costs are piling up.

One shutdown last spring to clean and replenish the chemical cost 17 million Canadian dollars. Mr. Marsh said that the company was still looking for a way to prevent the contamination.

The repeated shutdowns have caused SaskPower to miss multiple carbon dioxide deliveries to Cenovus Energy, the Canadian oil company that signed a 10-year contract with the utility to buy most of the gas. (Cenovus uses carbon dioxide to force oil from largely depleted wells.) SaskPower has had to pay 7 million Canadian dollars in penalties, offsetting most of the 9 million Canadian dollars in payments received.

On top of that, the carbon system is a voracious consumer of the electricity generated by Boundary Dam, which has 150 megawatts of capacity. Mr. Marsh testified that about 30 megawatts of capacity were consumed by the system, and an additional 15 to 16 megawatts were needed to compress the carbon dioxide.

Tim Boersma, the acting director of the energy security and climate initiative at the Brookings Institution, said that extensive power loss is a significant factor keeping other utilities from following SaskPower's lead.

"That is exactly the reason this is not going to fly," Mr. Boersma said. "The plant's efficiency goes down so dramatically."

As it continues to sort out the plant's problems, SaskPower is damping expectations. The utility cut its emissions reduction target for this year to 800,000 metric tons, from one million.

The company said it is working with the engineering firm that designed the project to solve the problems and increase efficiency. Mr. Marsh said there were indications that performance was improving. Last month, the utility said the system was working at 67 percent of capacity.

Even some environmentalists are hoping for a turnaround.

George Peridas, a senior scientist with the Natural Resources Defense Council's climate and clean air program, said his group did not endorse the use of coal, but it accepted that coal would continue to be part of the energy mix.

Carbon capture, he said, will be a "vital part" of reducing emissions. Based on discussions with SaskPower, Mr. Peridas said he was confident that Boundary Dam would eventually work out.

"I don't see any indication that the carbon capture system of this plant is broken," Mr. Peridas said. "It's had a bumpy start."